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PetroChina Stock: Is It in a Bearish Zone in 3Q17?

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Sep. 29 2017, Updated 6:37 a.m. ET

PetroChina’s stock performance in 3Q17

In terms of stock price appreciation, PetroChina (PTR) stock stands ninth on the list of the top ten stocks being compared in this series.

PetroChina stock has risen 3.6% since July 3, 2017, outperforming the broad market indicator, the SPDR S&P 500 ETF (SPY). SPY has risen 3.3% during the same period. However, the stock has underperformed the SPDR Dow Jones Industrial Average ETF Trust (DIA), which has risen 4.7% in the same period.

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PetroChina’s moving averages

In 3Q17, PetroChina’s 50-day moving average (or 50-DMA) stood below its 200-day moving average (or 200-DMA). However, the steep fall in PetroChina stock, in 1H17, has led to a decline in its 50-DMA. PTR’s 50-DMA, which stood 7.0% below its 200-DMA on July 3, now stands 9.4% below its 200-DMA. 

In such a scenario, PetroChina stock would need a sharp rise in its value to push its 50-DMA above its 200-DMA, a zone that denotes technical bullishness.

Why the rise in PTR stock in 3Q17?

In 1H17, PetroChina stock declined steeply. However, the downtrend has halted in 3Q17, and its stock has risen in the current quarter. WTI prices have risen 8.4% in 3Q17. However, as PTR stock’s correlation with WTI is not strong, standing at 0.37 in the past one-year period, the stock has not risen steeply.

Iin 3Q17, PetroChina reported improved 1H17 numbers. PTR’s net profit rose in 1H17 over 1Q16. This trend was due to the rise in operating earnings of its E&P (Exploration and Production), Marketing, and NGP (Natural Gas and Pipeline) segments. 

PetroChina’s E&P segment earnings rose from a loss in 1H16 to ~6.9 billion yuan (or ~$1.0 billion). This was due to a steep rise in oil prices. PTR’s domestic natural gas output also expanded, and PTR saw a reduction in its costs. 

The company also witnessed a 23% year-over-year rise in its Marketing segment’s earnings and a 22% year-over-year rise in its NGP earnings in 1H17. However, its Refining segment’s earnings fell in 1H17 over 1H16.

To wrap this series up, we’ll look at the stock returns of the final company in out list, ExxonMobil (XOM).

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